It is hard to confirm the exact amount, but the estimated number of cryptocurrencies in existence currently seems to exceed 18000.
Cryptocurrencies are a form of digital payment where transactions get verified, and their records are maintained by a decentralized network system (via cryptography) instead of a centralized authority. Cryptocurrencies are a smart and advanced way of making payments. But most importantly, it is a safe way of consolidating personal wealth without government intervention. Cryptocurrencies are almost beyond restrictions and confiscation.
You can easily use cryptocurrencies to make almost all kinds of payments, whether big transactions or small. Several smaller industries also include crypto payments, like a KFC in New York. Maybe in the future, even recreational centers like a mystery room Bangalore will be accepting payments in crypto.
What is Cryptocurrency?
A lot of us are now familiar with the term Cryptocurrency. But very few people outside the tech or investment circle know what cryptocurrencies are.
Cryptocurrency refers to a type of virtual or digital currency that is made secure using cryptography or encryption coding. This safeguarding process makes it almost impossible to counterfeit or double-spend crypto.
Many cryptocurrencies use blockchain technology to establish a decentralized network for secured transactions. Blockchain technology is distributed by an immutable ledger that enforces a transaction in a (business) network of computers. Since the government or any central authority does not issue cryptocurrencies, they are immune to governmental intervention. Almost no government has any authority to handle, confiscate or manipulate cryptocurrencies.
Cryptocurrency is leading the movement against traditional currencies, and several factors lead up to it. Cryptocurrencies are more secure because of the encrypted transaction method. It removes the threat of cyber-attack and the dependability on a particular financial system. Crypto payments also do not have any transaction limit like traditional payments. And there is no transaction cost while making payments from the crypto wallet. Also, any transaction with this digital currency takes only a few seconds. The independence of cryptocurrencies makes them the perfect modern mode of transaction.
Types of Cryptocurrencies
A new cryptocurrency crops up every few months in the financial industry. This is owed largely to the popularity and accessibility of cryptocurrencies. There are several types of cryptocurrencies, but each type differs in its particular features and designs. There are several types of cryptocurrencies, like Bitcoin, Ethereum, Tether, Binance, USDC, Terra, Solana, XRP, and more. But we will mainly discuss five types of cryptocurrencies based on the order of their market share.
Bitcoin is almost synonymous with Cryptocurrency at this point. Bitcoin is popularly considered to be the first decentralized Cryptocurrency that used blockchain technology to make digital transactions. Bitcoin’s blockchain acts as a public ledger of all Bitcoin transactions instead of a central authorized system like a bank. The verification process prevents fraudulent attempts and also makes transactions quick and cost-effective. Their market share is currently at $749 billion.
Ethereum is a platform that creates its personal decentralized apps instead of using other commercial applications like Google or Apple stores with the help of blockchain technology. They also create smart contracts meant to facilitate easy transactions. They use a token called Ether to facilitate those transactions on the Ethereum network system. What is intriguing about this particular crypto is that it can qualify as both a cryptocurrency and a software development sandbox. Their current market share is $313 billion.
Tether is a kind of stable coin or currency tied to Fiat Currency. Fiat Currency is a type of legal tender whose valuation is backed by a government that issues it. This is admittedly a slight derailment from the basic concept of Cryptocurrencies. It provides the perfect blend of Cryptocurrency along with the stability of the government-sanctioned currencies. Its current market share is $79.5 billion.
4. Binance Coin
Binance Coin is a cryptocurrency available on the Binance cryptocurrency Platform. It is mainly used in financial exchange and trading. It is simultaneously a cryptocurrency as well as a token used to support the Binance Decentralized Exchange and help build the system apps for it. It is important to note that it is not the only type of digital coin available on the Binance platform. Currently, its market share is $62.6 billion.
5. USD Coin
Just like Tether, the USDC or USD coin is another stable coin backed by the US dollar. USDC is a ‘fully digital’ coin backed by the US Dollar as their Fiat Currency. It benefits from the stability of the US Dollar but does not require any bank account or even citizenship of the state. This Cryptocurrency is based on the Ethereum Platform as well. Their market share is currently at $53.2 billion.
The future of cryptocurrencies looks seems promising to investors and analysts so far. Businesses and anyone interested in hitting it big with investments cannot deny the global pull of cryptocurrencies. Even with occasional crashes and usual risk factors, market analysts are optimistic about the impact of cryptocurrencies. According to market reports, by 2030, the global cryptocurrency market will hit an all-time high with a valuation of $5 billion. Cryptocurrencies are the present, and they will certainly be the future of global investment.